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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: Markets may be underestimating deflation risks in euro area - Stocks extend three-week high
- ECB, US data ahead
- Antofagasta unharmed by Chile quake
techMARK 2,782.92 -0.04%
FTSE 100 6,659.04 +0.10%
FTSE 250 16,415.96 +0.05%
The Footsie ended the day slightly in the blue after the release of largely in-line data on US manufacturing orders alongside a slightly stronger-than-expected reading on private payrolls.
Yet in the end any positive reaction was likely to be muted given traders' innate cautiousness ahead of the release of the monthly non-farm payrolls report, next Friday, and tomorrow's meeting of the European Central Bank's governing council.
No change is expected in the Eurozone's monetary policy, but above all because the single currency area's policymakers seem to have clearly flagged their intentions.
Be that as it may, and as Barclays Research explained in a note to clients last Friday, there is a real possibility that markets might not be fully pricing in deflation risks. Amongst other reasons, that is because of the possibility that China will export disinflation as it slows down lower than expected price pressures are also considered to be a risk in Japan and the strength in the euro.
One key element in the ECB's rationale is likely the fact that inflation expectations, as measured by so-called 'inflation break-evens' are currently in line with its definition of price stability.
US private sector payrolls increased by 191,000 in March, according to consultancy ADP, slightly below the 195,000 forecast. The previous month's estimate was revised higher, to 171,000 from a preliminary print of 139,000.
Antofagasta gains despite Chile quake
Shares in International Consolidated Airlines Group gained after the International Air Transport Association said global air freight grew at a 2.9% clip during February.
Mining stocks were on the rise this morning as metals prices gained across the board. Copper miner Antofagasta was among the best performers despite reports of an 8.2 magnitude earthquake in Chile, where the company is based. According to Reuters, the company has said that its copper operations were unharmed by the disaster. Resource peers Fresnillo and Randgold were also making gains early on.
Sports Direct rose sharply after Liberum Capital said on Tuesday the company could expand its "limited scale" in Europe. Analyst Sanjay Vidyarthi said that organic growth alone is not viable, but identified "potential [acquisition] targets which equate to over 1,000 stores across Europe and around €2bn of sales".
Domino's Pizza rose after a 10% increase in like-for-like sales at its 725 UK stores in the first quarter, driven by improved weather and the success of its Winter Survival meal deal.
Online fashion retailer ASOS moved higher after a 22% drop in first-half profits was not as bad as feared, while revenues jumped by 34%.
GlaxoSmithKline declined after saying it was "disappointed" with having to call an end to its clinical trial for its treatment for non-small cell lung cancer after results failed to meet expectations.
Centrica dipped after Credit Suisse said that a price rise at British Gas is unlikely before 2016, with the group likely to follow suit after SSE's price freeze.
A raft of companies went ex-dividend, including Aviva, Jardine Lloyds Thompson, Phoenix, Resolution, Pearson, Tullow Oil, DS Smith, Wolseley, 888 Holdings, Next and Interserve. |
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| | FTSE 100 - Risers
Fresnillo (FRES) 877.00p +3.66%
Mondi (MNDI) 1,073.00p +3.07%
International Consolidated Airlines Group SA (CDI) (IAG) 436.50p +2.83%
Randgold Resources Ltd. (RRS) 4,617.00p +2.28%
Barclays (BARC) 242.75p +2.23%
Marks & Spencer Group (MKS) 469.90p +2.20%
IMI (IMI) 1,522.00p +2.15%
Standard Life (SL.) 389.10p +2.07%
Antofagasta (ANTO) 856.50p +2.02%
Hammerson (HMSO) 564.00p +1.99%
FTSE 100 - Fallers
Resolution Ltd. (RSL) 288.40p -5.04%
Pearson (PSON) 1,014.00p -2.87%
Hargreaves Lansdown (HL.) 1,424.00p -1.79%
Morrison (Wm) Supermarkets (MRW) 207.20p -1.71%
ARM Holdings (ARM) 1,031.00p -1.53%
Whitbread (WTB) 4,182.00p -1.23%
Diageo (DGE) 1,832.00p -1.05%
Petrofac Ltd. (PFC) 1,425.00p -1.04%
Reckitt Benckiser Group (RB.) 4,855.00p -1.04%
Smiths Group (SMIN) 1,272.00p -1.01%
FTSE 250 - Risers
Ladbrokes (LAD) 141.50p +4.20%
Imagination Technologies Group (IMG) 213.20p +3.39%
Intermediate Capital Group (ICP) 449.90p +3.38%
Jupiter Fund Management (JUP) 427.50p +3.14%
Kazakhmys (KAZ) 268.20p +3.04%
COLT Group SA (COLT) 153.90p +2.87%
Rank Group (RNK) 161.10p +2.68%
Rathbone Brothers (RAT) 1,940.00p +2.65%
Northgate (NTG) 544.00p +2.64%
Foxtons Group (FOXT) 365.00p +2.53%
FTSE 250 - Fallers
Interserve (IRV) 707.00p -5.10%
Phoenix Group Holdings (DI) (PHNX) 652.00p -4.75%
888 Holdings (888) 147.70p -4.15%
AL Noor Hospitals Group (ANH) 1,127.00p -3.26%
Stagecoach Group (SGC) 378.00p -2.95%
Infinis Energy (INFI) 235.50p -2.89%
John Laing Infrastructure Fund Ltd (JLIF) 115.10p -2.79%
Computacenter (CCC) 650.50p -2.47%
Just Retirement Group (JRG) 138.10p -2.33%
Heritage Oil (HOIL) 248.50p -2.17% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mixed ahead of ECB meeting - Eurozone GDP revised down ahead of ECB meeting
- US factory orders rise
- US adds more jobs
FTSE 100: 0.10%
DAX: 0.20%
CAC 40: 0.09%
FTSE MIB: -1.02%
IBEX 35: -0.20%
Stoxx 600: 0.18%
European stocks were little changed as investors digested revised Eurozone growth figures and US data on jobs and factory orders.
The Eurozone's gross domestic product GDP growth was revised down to 0.2% in the final quarter of 2013 from the previous estimate of 0.3%, according to Eurostat.
It came after euro-area data released earlier this week showed the unemployment rate remained at 11.9% in February, while inflation fell to 0.5% in March from 0.8% in February, well below the European Central Bank's 2% target.
"Today's news complete a mixed picture for ECB policymakers to look at ahead of an interest rate decision tomorrow," said Danae Kyriakopoulou, Economist at the Centre for Economics and Business Research.
The ECB, which has come under mounting pressure to tackle falling prices and high unemployment, is expected keep its key interest rates at a record-low 0.25% and hold back on stimulus measures when it meets tomorrow.
Despite concerns the euro-area is headed towards deflation, ECB Vice President Vitor Constancio said the region would be able to avoid this as economic recovery gradually reduces spare capacity in the economy.
"The prospects for inflation are a cause for concern," Constancio said at a press conference in Athens yesterday.
"If indeed the recovery consolidates, it means that the slack in the recovery is reduced, and that will help on that score."
US jobs, factory orders
A report from ADP today showed US employers added 191,000 staff in March, compared to a revised 178,000 a month earlier. Analysts had expected 195,000.
Another report revealed factory orders in the world's biggest economy increased 1.6% in February, beating forecasts for a 1.2% gain. It followed a 0.7% fall in January.
"With the Federal Reserve threatening to increase interest rates in the near future, investors will continue to keep a very close eye on data to try and gauge when hikes could happen," said Spreadex trader Lee Mumford.
SBM Offshore, Asos
SBM Offshore was up after the Dutch supplier of floating oil-production platforms said an internal investigation found no credible evidence of improper payments made to Brazilian government employees from 2007 through 2011.
Asos jumped as the UK's largest online-only fashion retailer posted first-half pre-tax profit that exceeded analysts' estimates.
Deutsche Boerse AG fell nearly 3% as the German exchange operator said its Clearstream Banking SA unit is subject to a criminal investigation in the US.
Alcatel-Lucent climbed as Natixis SA raised the network-equipment maker to 'buy' from 'neutral'.
Neste Oil, a Finnish maker of renewable diesel, edged higher after Chairman of the Senate Finance Committee, Ron Wyden, proposed retroactively extending expired tax credits for biodiesel and renewable diesel until the end of next year.
Deutsche Post gained after Europe's largest mail service predicted operating profit would increase by an average of more than 8% through 2020.
The euro fell 0.25% to $1.3759.
Brent crude future dropped $1.304 to $104.260 per barrel, according to the ICE. |
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| | US Market Report | | US open: S&P 500 extends record after ADP data - S&P 500 pushes past record high
- ADP payrolls rise 191,000, close to forecasts
- Factory orders bounce back
Dow Jones: 0.18%
Nasdaq: 0.23%
S&P 500: 0.24%
US stock markets opened with small gains on Wednesday, with the S&P 500 extending an all-time high after economic data showed a decent increase in private payrolls in March.
"ADP employment change figures came in just a whisker away from market expectations and might encourage Friday's ever important non-farm employment change figures to come in close to expectations," said Alastair McCaig, Market Analyst at IG.
The S&P 500 was trading 0.2% higher at 1,890 in early trading after hitting a record high of 1,885.52 on Tuesday. The Dow Jones Industrial Average and Nasdaq both rose 0.2%.
According to Automatic Data Processing, private sector payrolls increased by 191,000 last month, up from 178,000 in February which was revised sharply higher than the initial estimate of 139,000. Consensus estimates were for a gain of 195,000.
Analyst Cooper Howes said that the data puts the three-month average at 164,000, a bit softer than the 187,000 average in 2013 "but still indicative of steady private payroll growth".
He said he is still confident of Barclays' forecast for a 225,000 increase in official non-farm payrolls, due to be released on Friday, as well as a one-tenth decline in the unemployment rate to 6.6%.
In other economic data, US factory orders rose by 1.6% to $488.8bn in February, according to the US Department of Commerce, ahead of the 1.3% that had been forecast and bouncing back from a 1% decrease in January.
Mortgage applications, including both refinancing and home purchases, declined by 1.2% in the week ended March 28th, compared with a 3.5% decline the previous week.
Netflix, MannKind
Netflix was swinging between gains and losses amid reports that the online video-subscription service will seek to avoid French rules on financing and promoting French-language movies when targeting that market.
MannKind surged after the biopharmaceutical company's inhaled treatment for diabetes won the recommendation of a US advisory panel
Apollo declined as the owner of the University of Phoenix said it received a subpoena from the Education Department for marketing and recruitment records. |
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| | Broker Tips | | Broker tips: Glaxo, Centrica, FirstGroup, ASOS Panmure Gordon has said that the disappointing outcome of GlaxoSmithKline's (GSK) clinical trial for its therapeutic cancer vaccine MAGE-A3 is already priced into the stock.
Panmure said that MAGE-A3 could have been one of the "three particularly transformative pipeline opportunities". However, given that the product was "very high risk" in an unproven area, the stopping of the trial should not trigger major downgrades to consensus forecasts for MAGE-A3.
Credit Suisse has lowered its estimates for Centrica, saying that a 2015 price rise at British Gas is no longer likely.
The bank said that after the decision by SSE to freeze residential prices until at least January 2016, Centrica "has to follow suit".
Investec continued to recommend investors to 'buy' shares of transport firm FirstGroup but has admitted there are 'bumps in the road'.
"The underlying message is still broadly consistent with previous updates, however, and whilst there are bumps in the road (with Student remaining the key risk), we remain hopeful that management will be able to turn the business around. That said, the stock might trade a little lower today," the broker said.
The recent weakness in ASOS' share price is a good opportunity for shareholders to top up their holdings, according to Numis Securities, which said that the business is "loaded with investment for growth".
"Following the trading update two weeks ago, we leave our forecasts unchanged and remain confident in the ASOS proposition – a unique global growth opportunity, with an investment-loaded P&L. We see the recent pull-back as an excellent buying opportunity and reiterate our positive stance." | | |
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